March 5, 2020

Concerns over coronavirus disease (COVID-2019) affecting tourism and travel activities in the country could dampen production of consumer-related manufactures such as food and beverages, the National Economic and Development Authority said.

The Philippine Statistics Authority reported in its Monthly Integrated Survey of Selected Industries (MISSI) that the total manufacturing index declined in January 2020. Year-on-year Volume of Production Index and Value of Production Index  dropped by 1.6 percent and 6.3 percent, respectively.

However, both indices showed improvement from the previous month’s growth of -9.1% and -8.7% respectively in December 2019.

“Intensifying government’s actions to monitor and implement mitigating measures will temper the potential negative impact of the COVID-2019 on the manufacturing industry,” said Socioeconomic Planning Secretary Ernesto M. Pernia.

As the epidemic scare lingers, output of firms that produce intermediate goods to overseas market will also be affected.

“Government needs to work closely with the industry in crafting and implementing strategies to effectively mitigate the possible impacts of COVID-19 on production,” the Cabinet official said.

Pernia said that there is also a need to map out entire value chains across primary, secondary, and tertiary players in the economy, to understand where critical parts are sourced, to identify alternative market sources, and to beef up inventory capacity to insulate against vulnerabilities.

“To help the manufacturing industry become more competitive and resilient, relevant government agencies need to swiftly implement measures that would streamline processes, facilitate trade, and reduce transactions costs,” he said.

To reinforce business continuity plans, government support will be needed for facilitating partnerships between Micro, Small, and Medium Enterprises (MSMEs) and large domestic and/or foreign enterprises and for leveraging advanced manufacturing technologies to enable greater resilience of firms and MSMEs amid the challenges posed by COVID-2019.

Meanwhile, Pernia said the recent eruption of Taal Volcano will also have a temporary impact on the manufacturing sector, given that CALABARZON accounts for about 31 percent of the country’s industry output. Thus, over the immediate term, government will need to fast track the rehabilitation of public infrastructure to ensure speedy recovery of firms, establishments, and households located in the area.